RBI extends action period on Rupee Co-operative Bank

Case Brief

The Reserve Bank of India extended the Directions applicable to Rupee Co-operative Bank Ltd., Pune for a further six-month period from November 22, 2014 to May 21, 2015. These Directions, issued under Section 35A of the Banking Regulation Act, 1949 read with Section 56, restrict the bank from granting or renewing loans and advances, making investments, incurring liabilities including borrowings and fresh deposits, disbursing payments, entering into compromises or arrangements, and selling or disposing of assets except as permitted by RBI. Depositors are permitted limited withdrawals of up to Rs 1,000 per account, subject to the prescribed conditions. The RBI clarified that the Directions should not be construed as cancellation of the bank’s licence and may be modified depending on the bank’s financial condition.